Charities allege dirty dealings in donation bin war

Sep. 29, 2013

Bill Brazier, above, executive director of St. Vincent de Paul — Detroit, said the charity is still assessing its losses and called ATRS' actions illegal. Brazier said St. Vincent de Paul helps hundreds of thousands of people get back on their feet. / Kimberly P. Mitchell/DFP

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Detroit Free Press Staff Writer

A donation bin sits outside of Society of St. Vincent de Paul tin Detroit on Thursday, Sept. 26, 2013. St. Vincent has sued a Texas-based textile recycling company, claiming the company schemed to have St. Vincent's donation bins replaced with the recycler's bins. Kimberly P. Mitchell/Detroit Free Press / Detroit Free Press

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The Society of St. Vincent de Paul in Detroit claims a Texas clothing recycler hasn’t been very, well, charitable.

The nonprofit that collects clothing and other goods for people in need said the Texas company, American Textile Recycling Services, has been running a scheme to remove St. Vincent de Paul’s donation bins from shopping centers and other locations around metro Detroit and replace them with bins owned by ATRS.

A federal lawsuit filed this month by the society and Planet Aid, a Massachusetts-based charity, paints a picture of a devious for-profit business muscling into the local clothing donation market at the expense of unsuspecting charities.

The charities claim that ATRS had a Jackson man haul away the charities’ bins and sell them for scrap before the charities had time to react, all because clothing recycling is a billion-dollar business in the U.S.

Clothing recyclers sell old clothes overseas or recycle the materials for use in products such as polishing cloths and furniture fillers.

“It’s unbelievable, it’s totally unbelievable,” said Dan Dalton, the Bloomfield Hills-based attorney representing the charities, as he discussed ATRS’ alleged tactics. “Like who would do this kind of stuff?”

Bill Brazier, executive director of St. Vincent de Paul — Detroit, said the charity is still assessing its losses and called ATRS’ actions illegal. Brazier said St. Vincent de Paul helps hundreds of thousands of people get back on their feet.

“Our sole focus is helping those in need. It’s unfortunate that people go to such great lengths to prevent us from doing that,” Brazier said.

An ATRS spokeswoman said last week that the company had not received the lawsuit and could not comment on specifics, but denied that the Houston-based company was involved in any shady dealings involving metro Detroit donation bins.

“The information is not accurate in terms of our business model,” said Debra Stevenson Peganyee, ATRS’ chief marketing officer, pointing out that the company, which was formed in 2001, abides by industry standards for operating donation bins.

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She stressed that the company is not involved in towing.

“We are a textile recycling company. That’s the only business we’re in,” Stevenson Peganyee said.

But the charities that sued ATRS point to a deposition provided by the Jackson man, who said he began towing away and scrapping donation bins on behalf of ATRS last year.

James Ball said in the deposition that he was working on behalf of ATRS but told not to mention the company’s involvement because “it would be a conflict of interest.”

Ball, who himself was sued by the St. Vincent de Paul society in a case that later was dismissed, said he was told he could move the materials from the charities’ bins to the ATRS bins but instead donated the materials to Goodwill Industries. In addition to receiving the scrap value from the bins, Ball said ATRS paid him $150 for each bin he removed.

The suit claims that ATRS would draft letters, sometimes fraudulently, saying that the charities no longer had permission to have bins at a particular location and giving the charities 72 hours to remove the bins.

The letters were then mailed on a Thursday, not to the local office in Detroit but, in the case of St. Vincent de Paul, to the national office in St. Louis. By the time the charities had received the letters, 72 hours would have passed and the bins, which cost about $1,300, would already have been removed before the charities could react.

Dalton said the goal of the lawsuit is to get ATRS to stop.

“We know the bins are gone. They’re scrapped,” he said.

Not all local charities are unhappy with ATRS, which has had an agreement with the Michigan Humane Society since April 2012.

ATRS bins in the region get to include a Michigan Humane Society logo, and then ATRS cuts the Humane Society a check for the donated materials — $20,000 so far, according to the Humane Society.

Ryan McTigue, a spokesman for the Humane Society, said his group has no plans to change the arrangement, although he pointed out that the Humane Society only recently became aware of the allegations against ATRS.

“They (ATRS) have been a supporter of the Michigan Humane Society and, to our knowledge, they have been upholding all legal and ethical standards,” McTigue said.

Stevenson Peganyee said property owners make their own choices about which donation bins to allow at their locations.

“There are many fine organizations that do good work, and Michigan Humane Society is one of them,” she said.

Stevenson Peganyee declined to say how much ATRS makes from the partnership with the Humane Society, a figure that could highlight one of the major criticisms of such arrangements — that charities receive only a fraction of the money made from the donations.